• Long-Term Care

New Flavor of Long Term Care Insurance Very Popular

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Hans Scheil
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The Pension Protection Act of 2007 paved the way for insurance companies to create life insurance and annuity policies that pay benefits for long-term care if they are needed. Just like traditional long-term insurance, these policies pay benefits for in-home care, assisted living facilities, and nursing homes. Unlike traditional long-term care insurance, premiums can never be increased and your beneficiaries receive a check for unused long-term care benefits after you die. Consumers are now snapping them up at a record pace. According to the Life Insurance Marketing Research Association LIMRA, in 2016, there was over 4 billion in product sales of Hybrid policies compared to 228 million in sales of traditional long-term care insurance. The catch with hybrids is they cost you more in the short run. Hybrid policies should be mixed in with an overall retirement plan versus just budgeting the annual premium as an expense.

 

In “The Complete Cardinal Guide to Planning for and Living in Retirement” Workbook edition, author Hans Scheil outlines 6 examples of hybrid policies offering similar long-term care benefits. One of the examples is shown below (Page 43):

This policy provides similar benefits to the traditional long-term care policy shown above. Since it is a single-premium life insurance policy, you pay the large premium up front, and if you do not use all of the benefit during your lifetime, your heirs will receive a benefit after you pass away. It only costs 9% more to additionally cover a male spouse the same age on a survivorship policy. The first $75,000 of benefits does not have 3% inflation. The second $75,000 of benefits has the 3% inflation rider. This policy has full underwriting with extensive health questions.

There are many options with hybrid policies and it can become confusing. For more explanation, pick up “The Complete Cardinal Guide to Planning for and Living in Retirement” and read Chapter 4 or the accompanying workbook and read Module 3. Cardinal Advisors can help you get the information you need to pick the right long-term care insurance plan for you or a family member.

Hans Scheil is the author of “The Complete Cardinal Guide to Planning for and Living in Retirement” and the accompanying workbook. He can be reached at Hans@CardinalGuide.com.

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  • Long-Term Care

New Flavor of Long Term Care Insurance Very Popular

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Hans Scheil
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Understanding the Upcoming 2026 Income Tax Increase: What You Need to Know

A Brief History of the Tax Cuts and Jobs Act (TCJA)

In today’s Cardinal lesson, we’re discussing the significant changes coming to income tax rates in 2026. This isn’t a proposal but a law already set in motion. The Tax Cuts and Jobs Act (TCJA), passed in 2017 and effective from January 1, 2018, brought about substantial reductions in income taxes. However, these reductions were only funded for eight years, meaning they will expire at the end of 2025.

What Changes to Expect in 2026

As of January 1, 2026, the tax rates will revert to their 2017 levels, adjusted for inflation. Key changes include:

  • The 12% bracket will increase to 15%.
  • The 22% bracket will rise to 25%.
  • The top rate of 37% will revert to 39.6%.

Not Just a Proposal

It’s crucial to understand that this change is already the law. Many people mistakenly believe that the tax rate increases are still under discussion. However, unless Congress enacts new legislation, these higher rates will take effect as scheduled.

Implications for Your Financial Planning

Impact on IRAs and 401(k)s

With the current lower tax rates, now is the time to consider strategies like Roth conversions. By converting funds from a traditional IRA to a Roth IRA now, you can potentially save a significant amount in taxes over the long term.

Why Planning Ahead is Crucial

For individuals with substantial retirement savings, understanding these changes is vital for effective tax planning. The window to take advantage of the current lower tax rates is closing, and planning ahead can make a significant difference.

Case Studies and Planning Opportunities

Hans Scheil and Tom Griffith discuss specific case studies and planning strategies in our latest video. These examples illustrate how different scenarios can be managed effectively:

  • Case Study 1: A married couple with an adjusted gross income of $150,000 in 2024 can convert part of their IRA to a Roth IRA, taking advantage of the lower current tax rates.
  • Case Study 2: High-net-worth individuals with large IRAs can save substantial amounts in taxes by planning conversions over the next two years.

Estate Tax Considerations

The TCJA also doubled the estate tax exemption, which will revert in 2026. This change can significantly impact high-net-worth individuals, making estate planning more crucial than ever.

Action Steps to Take Now

  • Review Your Current Tax Situation: Analyze how the upcoming changes will affect your finances.
  • Consider Roth Conversions: Take advantage of the lower tax rates before they expire.
  • Plan for Estate Taxes: Assess your estate plans in light of the changing exemptions.

Conclusion

The changes coming in 2026 are significant, but with proper planning and informed decision-making, you can navigate these changes effectively. Watch our video for more detailed insights and personalized advice.

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Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. The content of this website is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. Investments and/or investment strategies involve risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives. Index or fixed annuities are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by Brookstone Capital Management. Information provided is not intended as tax or legal advice, and should not be relied on as such. You are encouraged to seek tax or legal advice from an independent professional. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Any review of “The Complete Cardinal Guide” is specific to the book and is not an endorsement of the advisor. 
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Ansylla Ramsey

OFFICE ADMINISTRATOR

After 17 years as a hairstylist and salon owner, Ansylla joined the Cardinal Advisors’ team in April 2024.

She enjoys learning languages and is always planning her next international travel destination. 

Caleb Bartles

Life, Accident & Health insurance

Caleb Bartles obtained his Life, Accident & Health insurance licenses in the summer of 2024, and joined Cardinal Advisors’ team soon thereafter. Caleb previously served on active duty in the United States Air Force from 2012-2017, and graduated from Appalachian State University in 2020 with a B.S.B.A. in Computer Information Systems. After a few years working in the software industry, Caleb decided to make a career change to pursue his passion for finance and insurance.

Caleb lives in Fort Mill, SC with his beloved wife Jessica and two cats, Sméagol and Rosie. In his free time, he enjoys running, skiing, video games, going to concerts, and cheering for the Green Bay Packers.

Daphne Sutton

ADVISOR

Daphne started at Cardinal Advisors in 2024. She has been in the insurance field for about 5 years.
 
Originally from Tacoma, WA, she moved to Nc in 2005. When Daphne isn’t working, she spends time with her kids and makes body butter.

Tommy Fallon

ADVISOR

Tommy joined our Charlotte office after moving there in March with an interest in retirement planning. After graduating from NC State in 2022 with a Masters in Accounting, he worked in public accounting for some time and earned his CPA license. He is currently working on obtaining his NC Health, Life, and Medicare Supplement licenses. 

Tommy grew up in New Jersey, but has been living in North Carolina for the past 10 years. He enjoys skiing in the winter, going to the beach in the summer, and exercising during his lunch break.

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